How a Mega media circus helped Kim Dotcom come to rule a country that ought to hate him

On Saturday, near the start of one of the most ridiculous tech press conferences ever known, Kim Dotcom, the absurdist entrepreneur behind new file-storage service Mega, reflected on the significance of an FBI-instigated police raid that brought down his business and has him facing the wrath of the US government. In August, German-born Dotcom will face an extradition hearing that will determine whether or not he must leave his home in New Zealand to stand trial in the US on copyright charges that could see him thrown in jail for up to 20 years. But that hasn't stopped him launching an audacious new business.

“If it wasn’t for a giant comet hitting Earth, we would still be surrounded by angry dinosaurs,” said Dotcom, his huge frame perched behind a table on stage in the backyard of his lavish mansion north of Auckland. “If it wasn’t for that iceberg, we wouldn’t have that great ‘Titanic’ movie, which makes me cry everytime I see it.” And then, broad grin still in place, he added: “If it wasn’t for the raid, we wouldn’t have Mega.”

It might be just as true to say that, without the raid, New Zealand would have been worse off.

Dotcom held the press conference – which featured a mock FBI raid complete with black helicopter and actors dressed as special forces – to mark the launch of Mega, forged from the ashes of Megaupload. The new product, which features 50GB of free storage and has been favorably reviewed by Gizmodo, attracted 1 million registered users in its first 24 hours, Dotcom has claimed. While bearing many similarities to Megaupload, it asks users to accept terms and conditions that effectively absolve Dotcom of any liability in the event of piracy. Ingeniously, the service also encrypts files before they are stored on the site's servers, meaning Mega has no idea what they contain.

The event was one of high camp, with The Guardian describing it as "equal parts press conference, polemic and buffoonery." Despite its overwrought dramatics, however, it also demonstrated the power of one man to influence an entire country’s tech industry.

By standing up to the US authorities, by drawing attention to some of the country’s key Internet issues, and by being a master manipulator of the media, Dotcom has managed to transform himself from a cartoonish, criminal figure into a champion of Internet freedom and magnet for international attention – achievements that, in the eyes of many New Zealanders, deserve grudging respect. That’s unusual for a country that is typically suspicious of Dotcom-esque ostentation, showmanship, and displays of conspicuous wealth. New Zealand is a country that prides itself on egalitarian ideals, to the point where the "Tall Poppy Syndrome" – according to which any overt egoism is roundly mocked and the perpetrator quickly cut down to size – has been institutionalized in the collective consciousness. (Full disclosure: I'm a New Zealander.) Those same ideals, however, also make Kiwis quick to support an underdog.

“People like the fact that he stood up against the US and he didn’t lose,” says Juha Saarinen, an Auckland-based technology journalist and analyst. “People thought he would be thrown out.” Dotcom and his lawyers have fought US authorities’ charges that claim Megupload, which was popular as a place to store and swap pirated movies and music, was responsible for more than $500 million in harm to copyright owners and generated more than $175 million in criminal proceeds.

Asked on Saturday if he wants his day in court, Dotcom told the Wall Street Journal: “If it comes I will own it because I know I am innocent. There is nothing I need to fear. We have it all together. This whole indictment is crap.” Since his arrest in January last year, Dotcom has won several court battles against authorities in the US and New Zealand, allowing him to move back into his own home, have access to a studio to record an album, and to increase his monthly living allowance. In September, New Zealand’s Prime Minister apologized to Dotcom after it was revealed that the national spy agency had illegally conducted surveillance on the businessman.

Dotcom, whose birth name is Kim Schmitz, has his dark side, as evidenced in an ill-advised series of Tweets about some rape jokes that caused a stir in the press. But his bravado in the face of overwhelming force from the US appeals to the New Zealand psyche, says Saarinen. “Standing there and knowing that you’re really small in a big world, and sometimes you don’t have to do what the big boys tell you, that feels nice. That’s really invigorating for the whole country.”

Saarinen says Dotcom is also something of a role model for New Zealand entrepreneurs in that he shows the value in not being shy about self-promotion and telegraphing one’s achievements to the world. Since his arrest, Dotcom has released a treacly music video for a pop single recorded with his wife, a high-production video of him in a car race against F1 World Champion Kimi Raikkonen, and a satirical song about a New Zealand politician who somehow failed to remember that Dotcom had once donated generously to his election campaign.

“He’s pushing the boundaries,” Saarinen says. “It’s not the Kiwi way of doing things. You don’t tend to stick your neck out here very much. Maybe that’s not a bad thing if he encourages people to do that.”

Dotcom isn’t necessarily a great savior for New Zealand’s tech industry, because Mega is an international operation “that happens to have a bizarre headquarters in a mansion north of Auckland,” says Toby Manhire, another New Zealand journalist who has been following the Dotcom story closely. But the entrepreneur has won the support of Internet New Zealand because he has highlighted limitations in New Zealand’s tech infrastructure, such as its prohibitively expensive server space and dependence on only one international Internet cable, which means broadband costs are very high. Dotcom has pledged his support for the second cable, saying he would be its biggest customer.

Manhire, who is a columnist for New Zealand current affairs magazine The Listener and correspondent for UK newspaper The Guardian, as well as a freelancer for an seo company says some people consider the adulation that has been accorded Dotcom by parts of the local media as embarrassing and a distraction from other worthy tech enterprises in the country. At the same time, however, Dotcom has endeared himself to the public by participating in protest marches to save public broadcasting, appearing as Santa in a Christmas pantomine, and handing out ice creams in an Auckland gelateria. “He’s just a constant whirl of interestingness,” says Manhire. In October, Dotcom received ultimate validation by appearing on the cover of Wired, which added to his renegade self-image.

Dotcom has also used the spotlight to raise awareness of New Zealand’s punitive Internet “three strikes” copyright laws, according to which anyone who is warned three times for allegedly downloading copyright content illegally can be brought before a Tribunal, which can issue a fine of up to $15,000.

New Zealand marketing blog StopPress has argued that the country has on the whole benefited from Dotcom’s media circus. “In between stories of poolside shenanigans, ice cream give aways, and massive aquariums, there are stories about government oversight, the effect of copyright on New Zealanders, and the preparedness of New Zealand's internet infrastructure to support new technology businesses,” the blog said.

Dotcom's ludicrous escapades and outsized personality draw attention to those stories. “They might find him entertaining, embarrassing, or infuriating – but these emotions act as an important catalyst to start conversations on some very important subjects.”

Dotcom was granted residency in New Zealand in 2010 with a special investor visa after spending $10 million on government bonds. A month later, it was revealed that he had been convicted of eight minor business charges from a short stint in Hong Kong. Before the raid, he maintained a relatively low profile in New Zealand, despite an extravagant lifestyle of fast cars, big guns, and sharing hot tubs with scantily-clad women while being fully clothed himself. Since the raid, however, he has become a fixture of the nightly news. Even he now feels that coverage of his antics has reached saturation. At the end of the Mega press conference, he told reporters he was going to lie low until his extradition hearing in August.

In the meantime, Juha Saarinen, who, like Manhire, was at the event, welcomes the attention Dotcom brings to the quiet little country in the South Pacific. New Zealand is otherwise most known for the “Lord of the Rings” and “The Hobbit” movies.

“In some ways, it’s nicer publicity than Peter Bloody Union-Buster Jackson who gets Warner Bros to rewrite our laws, which is so shameful,” says Saarinen. The New Zealand government rewrote union legislation so that Peter Jackson and Warner Bros would agree to keep filming of “The Hobbit” in New Zealand in the wake of an actors’ strike. To Saarinen, Dotcom's antics are more tasteful than that.

While the Dotcom circus might be “slightly dodgy,” Saarinen says, it’s not too bad. And besides: “It’s nice to see something actually happening.”